A weak lead from Hong Kong, coupled with lower European and Dow futures, kept Singapore shares in negative territory yesterday.
Traders were sidelined ahead of today's release of minutes by the United States Federal Reserve's July Federal Open Market Committee (FOMC) meeting that could involve a rate rise sooner than later.
The Straits Times Index closed down 0.54 per cent or 15.45 points to 2,843.35, weighed down by Singtel, HongKong Land, Thai Beverage and banks DBS Group and OCBC.
Singtel slipped 1.4 per cent or six cents to $4.21 on reports that Temasek Holdings may sell a portion of its US$2.4 billion (S$3.2 billion) stake in Thailand's Intouch Holdings.
Intouch is the largest shareholder in Thailand's top telco, Advanced Info Services, with a 40.45 per cent stake. Singtel is the second largest with 23.32 per cent.
The index was also dragged down by HongKong Land, which fell 1.69 per cent or 11 US cents to US$6.41, and Thai Beverage, which dropped 1.45 per cent or 1.5 cents to $1.02.
Banking counters DBS edged down 0.4 per cent or six cents to $14.75, while OCBC lost 0.4 per cent or three cents to $8.44.
Palm oil producer Golden-Agri Resources was among the most actively traded, shedding 3.9 per cent or 1.5 cents to 37 cents, with 31.8 million shares traded.
Another laggard, Wilmar International, lost 1.3 per cent or four cents to $3.11. UOB KayHian, which has a sell call on the firm, said Wilmar's management had mentioned in a recent briefing that this is the first year that the palm oil trader has encountered large trading losses.
"Trading risk remains a concern for now," the broker said.
Other actively traded counters include Noble Group, which eased 3.4 per cent or 0.5 cent to 14.2 cents after Moody's rating downgrade on concerns over its liquidity over the next 12 months. About 80.6 million shares changed hands.
Rating agency Moody's downgraded the commodity trader on concerns over its "limited ability to generate positive operating cash flow and the large debt maturities in the second quarter of 2017".
WE Holdings plunged 20 per cent or 0.1 cent to 0.4 cent, with 62.6 million shares traded. Ezra shed 2.3 per cent or 0.1 cent to 4.3 cents, with 35.7 million shares traded.
Elsewhere in Asia, Hong Kong fell 0.48 per cent after China on Tuesday approved the launch of a keenly awaited stock trading link between Hong Kong and Shenzhen.
Analysts said the approval of the Hong Kong-Shenzhen connect scheme had been expected, so the market reaction was muted.
Pacific Radiance shares gained 0.82 per cent at 12.3 cents after DBS Group Research maintained a fully valued call on the stock. "Unless oil prices rebound substantially, the industry looks set to remain in the doldrums in the near term," DBS said.